In my 3 years of private practice ownership, I’ve become a more savvy business owner.
I’ve discovered there are 4 areas that are vital to your practice’s success:
- building long-term relationships
Additionally, I’ve found there are several challenges facing independent optometry, that require us to be different from online eye exams and e-commerce.
A local lab rep told me about a doctor who had turned over his optical to a staff member interested in dealing with another lab. In turn, the doctor began losing between $90-100 per job.
Obviously, this is significant money!
In 2016, your profit margins are already slim, and you must be able to negotiate in this area. You must be educated on lab offerings from lens edging fees to shipping prices.
This can save you hundreds to tens of hundreds of dollars per year.
I've said before as a new practice owner, you have no idea the values and deals you are capable of receiving from manufacturers. This is where a consultant engaged in day to day private practice can be of benefit to you.
As a doctor, it is easier to turn over the day-to-day optical operations to someone else, but that can greatly affect your bottom line.
Practice ownership isn't for the lazy.
It requires continual research and improvement. If you aren't innovating your day-to-day processes or efficiencies, it's easy to become complacent. From regulations set by Medicare to new HIPAA standards, healthcare evolves daily.
When I graduated five years ago, I did not have any concept of what healthcare would be like in 2016. In the same way, we are unable to predict what healthcare in 2021 will look like. As an optometrist, you must stay current on new clinical research and treatment drugs; as a business owner you must stay current on the optometric industry, healthcare industry, and even the political environment.
3) Build Long-Term Relationships
I have a new rule. I learned it my first year when a new eyewear rep opened me an account, sold me 3k worth of product, and then was gone the next month.
I now never open accounts with new company reps.
The first question I ask is, "How long have you been with this company?" The next question, "Who did you work for before?"
When I bring in a product, my intention is to have a relationship with the company for the long-term future.
Why is this important?
- Product Mix - Established eyewear reps know their products. They know what colors and sizes sell. More importantly, they know key facts and production information to help you convey the story behind the eyewear to your patients. While every practice is unique, it's helpful to have guidance with a new line especially if you are new to the eyewear industry. You will gain confidence in this area with time.
- Product Success - The products that I am the most successful with come with great rep support. I have a history of the reps in my office. I count on their product updates. I can count on the reliability of their products. I can also be confident that they will switch out products for me fairly if something doesn't work.
When you open a practice, you must understand your practice identity. As the practice grows, it becomes more difficult to maintain that identity.
The key to success is to use your identity in all aspects from your online marketing to your daily exchanges with patients.
Your patients should be able to recognize and share your practice identity.
Challenges to Independent Optometry
While disruptive outside forces like Opternative and Warby Parker seem to monopolize the discussion, vertical integration, managed care, and our own failure to educate our patients are our biggest challenges to our own profession.
We've got to address and innovate regarding the changes to our profession.
1) Vertical Integration
In the past, vertical integration was limited to frame suppliers and optometric corporation.
Today's integration extends from lens suppliers to online retail, from investors outside the industry to commercial retail chains. Even more troubling is the ownership of labs by insurance taking a huge cut of retail profit.
2) Managed Care
Each practitioner decides independently how they will address this issue.
What plans will you carry? Will you be high volume or high revenue per patient?
There's a lot of focus on niche practice, but this may or not be feasible depending on location.
Since my opening, I have not taken all vision plans, but make an effort to educate potential patients on why we may not take their plan. If you are able to just convert one patient, your cash pay profit will exceed you profit on low paying vision plans. Additionally, those patients are more likely to send other cash patients.
3) Failure to Educate
Many of the problems in optometry should have been addressed years ago.
Commit yourself to educating every patient on the importance of annual health exams.
Contact lens wearers should have their lenses updated every 1-2 years and educated on the importance of new lens modalities and technology on the health of the eye. As a practitioner, if you don't educate your lens wearers, they will fail to see the importance in what you do annually and go to outside contact lens distribution sources.
Small business ownership is a day to day commitment. In an ever-changing healthcare and optometric environment, it has become more difficult. The most successful optometric practices have successfully mastered negotiation and research. They are committed to identity and building long-term relationships.
What do you think are the biggest threats to optometry? What are the keys to success in this healthcare and optometric market? Please leave a comment below.